The
Chairman: In the absence of any other Member wishing to
speak, I call the Minister to reply to the
debate.
2.50
pm
Mr.
Malik: A question was raised by the hon. Member for West
Chelmsford and reiterated by the hon. Member for Berwickshire, Roxburgh
and Selkirk. I will write to them in more detail, but one of the
challenges was that the HIPCs did not qualify in the way that we
expected. Another element in the equation was exchange rates, and a
third was payments only made as due. I will write in more detail to
both hon.
Gentlemen. The
hon. Member for Berwickshire, Roxburgh and Selkirk asked whether this
was a new phase covering 2016 to 2019. The answer is yes. DFID
responded to all the IDC recommendations and I can obviously provide
Members with a copy. DFID welcomed the report and broadly accepted most
of the
recommendations. The
update on the executive director is that one has been appointed and
will take up the post in September. The hon. Member for North-East
Milton Keynes asked me about the IDA contribution level and the
percentage of DFID’s budget. As the Committee will be aware,
DFID received a large increase through the comprehensive spending
review. The proportion of its budget going to IDA is the same under
this CSR, but we have had to take into account a number of
factors. Mr.
Burns: As the Minister will appreciate, one of the crucial parts of
the whole equation behind these two orders is the SDRs. Could he share
with the Committee the exact basis for the value of
SDRs? Mr.
Nicholas Soames (Mid-Sussex) (Con): Write to
him!
Mr.
Malik: That is a splendid idea. Why not do
that?
Mr.
Burns: May I intervene
again?
Mr.
Malik: No. I think I will make some progress and respond
to other
questions— [Interruption.]
The
Chairman: Order. It is up to the Minister to accept or
reject interventions. I thought that the suggestion made by the hon.
Member for Mid-Sussex was helpful. I think the whole Committee would
welcome that
response.
Mr.
Burns: Will the Minister give
way? Mr.
Malik: I will gladly give way
again.
Mr.
Burns: I appreciate the Minister’s helpful offer to
write to me. However, given the context in which we are discussing the
orders, it would be for the benefit of the Committee if he could answer
that question so that we could have greater understanding and
clarity.
Mr.
Malik: At a very basic level, SDR is a basket of
currencies, which are looked at in each replenishment round. I hope
that gives the Committee a quick understanding of how SDR comes about.
If more detail is required, I will be happy to provide it.
On the
question how DFID decided on its contribution of £1.3 billion,
as with any such spending decision, a wide range of factors is
considered and assessed before a final contribution is decided. In this
instance those included the contribution that the institution could
make to achieving the MDGs with different resource levels, the role
that the institution plays in the international system, the level of
financing provided by other donors, the reforms that our finances can
bring about, and other possible uses of resources. Decisions on our
negotiating priorities and on the level of our contribution were
informed by views from DFID teams on the effectiveness of the World
Bank, including
in-country.
Mr.
Lancaster: Will the Minister give
way?
Mr.
Malik: I am about to respond to the hon.
Gentleman’s point, so he may not need me to give way. No
cost-benefit analysis is available for public consumption in the sense
in which I think he requested
it.
The
Chairman: Order. The Minister has had two notes that he
has missed. They might help him in answering the other
points.
Mr.
Lancaster: DFID is enjoying an increased budget, heading
towards 0.7 per cent. There is a general feeling that the Department
sometimes takes the easy option of increasing spending via
multilaterals because that is a relatively straightforward way of
spending that money, rather than looking at other potential avenues
where the money could be spent. I seek the Minister’s
reassurance that a basic cost-benefit analysis was done before the
amount of money was decided. The answer is a straightforward yes or
no.
Mr.
Malik: I have already explained that we carried out an
internal analysis, and what its elements were. Our approach to
multilaterals as we move forward is best described as
“multilateralism with edge”. That means that we will
invest in multilaterals that we believe are effective, and invest less
in those that we believe are less effective. The World Bank, according
to the Easterly review carried out a few months ago, is the most
effective international development body out
there.
Mr.
Lancaster: I am grateful to the Minister, who is being
very generous. Given that he says that the cost-benefit analysis was
carried out, why is it not in the public domain? In this era of
openness about public spending—about DFID spending—why
does he refuse to put that analysis in the public
domain?
Mr.
Malik: I have just explained that we carried out our
analysis. At the end of the day it is a judgment call by Ministers.
That is what dictates the
outcome. Decentralisation
has been a matter of concern. We believe that it will be make IDA more
efficient, relevant and effective. Decentralisation is key to ensuring
effective implementation of the Paris declaration on aid effectiveness,
including enhancing country ownership, aligning behind Government plans
and, of course, harmonisation. We have pushed the World Bank on
decentralisation, with
some results. By the end of the current year the number of staff in
Africa in country will increase by 50 per cent., and, importantly, all
new international staff for Africa will be based
there. The
hon. Member for Berwickshire, Roxburgh and Selkirk asked about the
MDRI. Payments are made as they become due, and we pay only what is
needed. Expenditure is recorded in DFID publications. We can provide
details of that
later.
Mr.
Moore: The order represents a fairly significant change in
the arrangements by which the Government pay over the amounts. I
understand that in the past the Minister would come to the House every
time there was a request for the payment from the organisation. Now
payment can be made on account at any time. Will the Minister not be a
wee bit more forthcoming about how the House will get information about
those payments as they go along?
Mr.
Malik: I have given my initial response. I have some
sympathy with the hon. Gentleman’s perspective and I
will—[ Hon. Members: “Write to
him!”] I will consider the best way to give him and other
Members comfort on that
issue. Mr.
David Winnick (Walsall, North) (Lab): I am listening
attentively and think that my hon. Friend the Minister is giving a very
comprehensive response. There has been sniggering from Opposition
Members about responding in writing. However, some detailed and
technical points are being raised and I see no reason why my hon.
Friend should not reply in that manner. If he does reply in writing, I
hope that he will write to the rest of the Committee, but I do not see
any reason why he should keep in his head all kinds of technical
details. Otherwise, what is the point of having senior civil servants
in his Department?
[Interruption.]
The
Chairman: Order. Mr. Shepherd, if you would
like to make an intervention, I am sure that the Minister will be
pleased to take one from you. However, it might be better if you got up
off your chair, rather than intervening from a sedentary
position. Mr.
Richard Shepherd (Aldridge-Brownhills) (Con): I hope that
the Minister will respond to his colleague. We are interested in the
matter and expect a detailed explanation on the points raised, but we
are going to be asked to authorise the orders. This is about public
money. This is extraordinary: there should have been better preparation
and the questions should be answered. The Minister is accountable to
the Committee for the purposes of the debate and we are entitled to a
full explanation.
The
Chairman: Thank you for taking that intervention,
Mr. Malik.
Mr.
Malik: Always a pleasure.
Mr.
Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab): I
get the feeling that I am in a different Committee from some Opposition
Members. I have followed IDA replenishment discussions almost since
they were introduced. This is the most information that I have
ever had. I do not remember the Minister of State in the Conservative
Government, sitting in the House of Lords, answering a single question
on IDA replenishment. We have only just started the debate. Hon.
Members can stay all afternoon if they like, but they should not give
the impression that the Minister is not answering when the civil
servants are clearly very busy giving as much information as they
can.
Mr.
Malik: I am not surprised at all that my hon. Friend the
Member for Walsall, North and my right hon. Friend the Member for
Coatbridge, Chryston and Bellshill have shown the eminent common sense
for which they are respected in the House.
Mr.
Winnick: Will the Minister give
way?
The
Chairman: Order. Not if you are going to dispute that
point, Mr.
Winnick.
Mr.
Winnick: Mr. Hancock, I certainly would not
want a dispute with you because 24 years ago, almost to the day, I was
trying to stop you coming
here. Does
the Minister agree that my right hon. Friend the Member for Coatbridge,
Chryston and Bellshill is one of the most experienced Members in
dealing with overseas development? He has contributed much of his
parliamentary time over many years to that worthy cause and his word
should be taken with due
seriousness.
The
Chairman: Order. Before we have too many emotional
tributes to the experience of the right hon. Member for Coatbridge,
Chryston and Bellshill, I should ask the Minister to stick to the
business before us, rather than Mr.
Clarke.
Mr.
Malik: Just one sentence, Mr. Hancock. I agree
with my hon. Friend the Member for Walsall, North that there is no
doubt that nobody is more respected in the House on these issues than
my right hon. Friend the Member for Coatbridge, Chryston and
Bellshill.
I
shall move on to debt sustainability. It is clear that lenders and
borrowers need to play their part in ensuring that poor countries do
not build up new debt burdens. The debt sustainability framework of the
World Bank, the IMF and the African Development Bank guides decisions
on new lending. The banks use DSF to determine the best way to provide
assistance to the poorest countries. If a country risks acquiring too
much debt, assistance will be provided in the form of grants or, in
some cases, a mixture of grants and loans.
On the
question about the adjustments to the MDRI, these are made every three
years in line with the replenishment for IDA. We will need to return to
Parliament in three years to seek assurances over IDA 16 disbursements.
I am quite surprised by the heat that is coming from Opposition
Members. One would think that they were unaware of that and completely
opposed to the process. There is a cross-party agreement on where we
are. Opposition parties have been consulted constantly along the way.
This just seems like cheap political point
scoring.
Mr.
Burns: Will the Minister give
way?
Mr.
Malik: No, the Minister will not give way.
I should like
to explain why the cost-benefit analysis is not public to give a bit
more comfort to the hon. Member for North-East Milton Keynes. We have
published our response to the International Development Committee,
setting out how we make financing decisions. There is an annual report
to Parliament on the UK’s overall relationship with the World
Bank. We have appeared before the IDC and discussed its views on the
bank in detail. The institutional strategy paper setting out a vision
for the bank has been published and we will be publishing a new
institutional strategy paper next year, which I hope will deal with
many of the concerns—legitimate or otherwise—that have
been
raised. On
the question whether money is being spent at the World Bank because it
is convenient, I have already said that the answer is no. I have given
good reasons why we are spending there. All the actors in the
international development field agree that the World Bank is the most
effective institution in this area of
work. On
the impact of civil society organisations, I have no doubt that they
are crucial in the fight against poverty. That is why between now and
2010-11, DFID will increase the amount that we utilise on civil society
organisations, both in the south and at home, by some 55 per cent.,
which is greater than the growth of spend within DFID.
We also have
regular discussions with civil society organisations about their views
on IDA, and on IDA 15 replenishment in particular. Civil society
organisations were also able to comment on the deputy’s
conclusions in draft before they were agreed. They also met all IDA
representatives during replenishment, so their views were taken into
account. I
think that I have dealt with most of the questions that were raised.
DFID completely agrees with the IDC, which has stated
that: “The
World Bank is a vital component in the international development
system. The Bank is a major provider of development funding, analysis
and advice. Its lead is often followed by other donors and
agencies.” I
have repeated that quotation because it is crucial, given the number of
times that the IDC is cited in these discussions. The pledged UK
contribution to IDA 15 takes into account this vital role and is in
keeping with our commitments to increase aid through effective
institutions. The MDRI has been a great success, delivering a
significant amount of debt relief in a relatively short space of time.
We must keep the promises that we made to poor countries in 2005
through the G8, and continue to work to ensure the full financing and
implementation of the MRDI. The MDRI could deliver over $50 billion of
debt cancellation if all remaining HIPCs qualify. I will end on that
note. I hope that I have done justice to hon. Members’
questions, and I thank them for their
support.
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